Here's a national story with direct relevance to Arkansas. In the midst of national markets in which average returns have been zero for a decade or more (a net loss on S&P 500 since 2000), giant public pension funds are still figuring future benefits on average annual investment returns of 8 percent.
If you can get 8 percent annually somewhere, let the world, or at least me, know, please. The problem:
Now public pension funds across the country are facing a painful reckoning. Their projections look increasingly out of touch in today’s low-interest environment, and pressure is mounting to be more realistic. But lowering their investment assumptions, even slightly, means turning for more cash to local taxpayers — who pay part of the cost of public pensions through property and other taxes..
In New York, the city’s chief actuary, Robert North, has proposed lowering the assumed rate of return for the city’s five pension funds to 7 percent from 8 percent, which would be one of the sharpest reductions by a public pension fund in the United States. But that change would mean finding an additional $1.9 billion for the pension system every year, a huge amount for a city already depositing more than a tenth of its budget — $7.3 billion a year — into the funds.
But to many observers, even 7 percent is too high in today’s market conditions
This is why the defined benefit pension is a dinosaur, much as I hate to say it.
So now he has fired not only Meyer, but also Huckabee?
You remind me eL, I meant to comment on your Rick Santorum link. About that…
Raising a glass up here in the hills! Great work Arkansas Public Law Center.